Ahead of FB's earning announcement, new research shows just how addicted we're getting
Facebook’s first-quarter announcement this evening promises a small moment of reflection following a frenetic few months for the company. Philosophical mysteries abound. We don’t know yet if Facebook will turn Oculus Rift into a tacky branded headset or if it will subsume WhatsApp into some evil plan to own the world. Will Facebook Paper end up on the same dust heap as its Home operating system? Is forcing Facebook users to download a separate Messenger app madness?
What we do know, is that outside of all long term pontifications and protestations of doom, the money-making engine at Facebook is purring smoother than ever. Released today, Adobe’s Q1 2014 Social Intelligence Report gives us a peek under the hood in time for tonight's announcement, capturing a sample of 260 billion ad impressions and 226 billion post impressions to gauge how we're using the site.
The core takeaway is that we might all like to talk about tuning out and leaving Facebook, but our actions are speaking much louder and more profitably than our words. We're engaging with more content, viewing more ads and clicking more things, in huge numbers. Adobe’s report saw that Facebook is getting marginally less revenue for each ad we clicked on for this past three months, down two percent from this time last year and eleven percent from the Christmas rush. Not matter at all though, as click through rates surged 160 percent, the raw number of ad clicks rose 48 percent, and impressions jumped by 40 percent over the previous quarter.
Facebook tweaked its algorithm this quarter and people grumbled about advertisers jumping ship and the company losing its financial wind. But according to Adobe, after the change, our engagement with links posted to Facebook jumped by 167 percent. We’re more engaged on Facebook than ever before, commenting and sharing things more, instead of giving them the old disinterested 'like' and moving on.
Video views are up 785 percent from Q1 2013. After Facebook introduced auto-play videos in Q4 2013, engagement naturally increased. The video numbers are a good sign as the company looks to continue rolling in video ads into our news feed.
Facebook’s acquisition strategy might be terrible and its innovation outside of its core strength might be patchy. But for the sixth straight quarter it looks set to beat earnings expectations handsomely, and not just according to Adobe's data. Wall Street is forecasting Facebook to report $2.4 billion in revenue for the first quarter of this year, up over 60 percent on the same period in 2013. Analysts expect $613 million in net revenue, which is almost double the corresponding three months last year.
Holding par against these estimates tomorrow would still be a pretty good win for Facebook. But don’t be shocked if it outperforms. The company may one day spend itself into oblivion and colossally misread the future. But as Adobe’s report outlines, for now, there are few companies that could boast to monetizing its core function so effectively.
[illustration by Brad Jonas for Pando]